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It says "Only Part of Your IRA Contribution Is Deductible". Somehow the software is missing the part that 6k traditional IRA is for me and 6k for my spouse. It is taking the whole 12k and tagging it

Neither of us have employer retirement plans so we should be able to contribute 12k with tax deduction. My wife was looking for a job in 2019, I worked the full year. I think this is a turbo tax bug.
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3 Replies
ColeenD3
Expert Alumni

It says "Only Part of Your IRA Contribution Is Deductible". Somehow the software is missing the part that 6k traditional IRA is for me and 6k for my spouse. It is taking the whole 12k and tagging it

Make sure that you entered each contribution under the correct person. Sometimes you have to go through an entire interview before you are finished and can access the next person. If you did not, it is easy to enter it twice under the same person. If your wife did not have earned income, you will have to do a spousal IRA.

 

Kay Bailey Hutchison Spousal IRA Limit

For 2019, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts.

  1. $6,000 ($7,000 if you are age 50 or older).
  2. The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts.
  1. Your spouse's IRA contribution for the year to a traditional IRA.
  2. Any contributions for the year to a Roth IRA on behalf of your spouse.

 

This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $12,000 ($13,000 if only one of you is age 50 or older, or $14,000 if both of you are age 50 or older).

 

@rickprotik

It says "Only Part of Your IRA Contribution Is Deductible". Somehow the software is missing the part that 6k traditional IRA is for me and 6k for my spouse. It is taking the whole 12k and tagging it

Thanks Coleen. I deleted the IRA contributions and did them again for probably the 4th time now.

 

The process starts by asking to check mark boxes on Traditional, Roth etc. I clearly mark Traditional for my wife and I (2 check boxes). Then it proceeds to ask questions asking about contributions, first I say 6k for myself, then it clearly asks if there are contributions for wife e.g. Did <wife name> make Traditional IRA contributions.. I say yes and put another 6k. Once it has noted the contributions it says:

 

Only Part of Your IRA Contribution Is Deductible

 

<MyName> can deduct only $6,000 of <MyName> IRA Contribution.

 

Deductible IRA contributions cannot exceed $6000 ($7000 if you're of age 50 or older) and must be equal to or less than your earned income. One or both of these apply to you, which means you also have a non-deductible excess contribution of $6,000

 

I am deducing that I can NOT contribute towards 'spousal IRA' as my wife has no income on her own? I don't understand if that is really the reason OR some other reason OR this is a software bug?

 

This year Turbo Tax screens have been quite buggy (they keep picking older values although I go back using turbo tax back button and update values). How do you suggest I proceed?

It says "Only Part of Your IRA Contribution Is Deductible". Somehow the software is missing the part that 6k traditional IRA is for me and 6k for my spouse. It is taking the whole 12k and tagging it

It would only be partly deductible if you or spouse were covered by a retirement plan. 

 

Covered by a retirement plan at work is usually indicated by box 13 on your W-2.

Make sure the W-2 (s) were entered for the correct spouse.
  Make sure that the IRA contribution is for the correct spouse.

Check your W-2 box 12 also.

TurboTax makes that determination if any of the following are true:

1) Box 13 (retirement plan) on your (or spouses) W-2 is checked,
2) Box 12 on your (or spouses) W-2 contains codes D, E, F, S, or AA/
3) You answered “yes” to the “Are you covered by a Retirement Plan at work” in the interview.
4) You have a self-employed retirement plan.

 

Look at the "IRA Contribution Worksheet" line 10 - are either box checked?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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